| Profit Maximisation - Exercise 3.32 | Unnamed: 1 | Unnamed: 2 | Unnamed: 3 | Unnamed: 4 | Unnamed: 5 | SOLUTION |
|---|---|---|---|---|---|---|
| (a) | Glass | Wood | Silver | Gold | Total | |
| Units demanded | 2400 | 900 | 2100 | 750 | ||
| Machine hours per unit | 0.25 | 0.25 | 0.5 | 0.5 | ||
| Total machine hours required | 600 | 225 | 1050 | 375 | 2250 | |
| (b) | Selling price | 20 | 23 | 31 | 35 | |
| Less Variable costs | 13 | 18 | 20 | 23 | ||
| Contribution per product | 7 | 5 | 11 | 12 | ||
| (c) | Contribution per product | 7 | 5 | 11 | 12 | |
| Machine hours per unit | 0.25 | 0.25 | 0.5 | 0.5 | ||
| Contribution per machine hour | 28 | 20 | 22 | 24 | ||
| (d) | Order of priority | first | Glass | |||
| second | Gold | |||||
| third | Silver | |||||
| fourth | Wood | |||||
| (e) | Machine hours available for production | 600 | 75 | 1050 | 375 | 2100 |
| (f) | Machine hours available | 600 | 75 | 1050 | 375 | |
| Machine hours per unit | 0.25 | 0.25 | 0.5 | 0.5 | ||
| 2400 | 300 | 2100 | 750 | |||
| units | units | units | units | |||
| (g) | Contribution per machine hour | 28 | 20 | 22 | 24 | |
| Machine hours | 600 | 75 | 1050 | 375 | ||
| Total Contribution | 16800 | 1500 | 23100 | 9000 | 50400 | |
| (h) | Less fixed assets | 17500 | ||||
| Profit | 32900 |